Independent Contractor Non-Disclosure Agreement

An independent contractor non-disclosure agreement prohibits individuals from sharing any protected information with others. It creates a legally binding promise that the contractor will not disclose confidential information without your consent.

Contractors that violate this agreement may be liable for breach of contract and owe monetary damages.

Independent contractors are essential to your business, but you must also protect your valuable information from disclosure.

Reasons for Independent Contractors to Sign an NDA

There are several reasons why you should have independent contractors sign an NDA:

• Protecting Confidential Information: Contractors often gain access to sensitive company information, such as financials, marketing strategies, or product plans. An NDA ensures this information stays confidential and isn’t shared with competitors or third parties. For additional confidentiality protection in broader situations, you can also consider using a general confidentiality agreement.
• Clarifying Intellectual Property Ownership: When contractors create intellectual property—like designs, software, or written content—an NDA makes it clear that the company owns the work. This helps prevent any confusion or disputes over ownership.
• Establishing Trust: Having contractors sign an NDA shows they’re serious about maintaining confidentiality and respecting your business. It sets the tone for a trustworthy and productive working relationship.
• Legal Protection: An NDA defines what’s considered confidential and explains the legal consequences of breaking that confidentiality. This provides protection for both parties and minimizes the risk of accidental disclosure.
• Maintaining Competitive Advantage: By keeping your business information private, contractors help protect your competitive edge. This level of protection can build confidence and lead to stronger, long-term relationships with reliable contractors.

Key Clauses for Employers in Independent Contractor NDAs

Employers should include specific clauses in NDAs for independent contractors to ensure the protection of confidential information and intellectual property.

Ownership of Intellectual Property

With independent contractors, it’s important to state that any work product or intellectual property they create during the project belongs to the company. Independent contractors own their work unless otherwise stated in the NDA.

Confidentiality Beyond Contract Term

Independent contractors may work with competitors or similar companies. So it’s important to extend the confidentiality obligations beyond the term of the contract so they can’t disclose information after the relationship ends.

Disclosure to Subcontractors or Collaborators

Independent contractors may work with subcontractors or other third parties. Make sure your NDA addresses whether and how the contractor can share information with these collaborators and if they need your approval first.

Clarify Relationship for Legal Purposes

An NDA for independent contractors should state that the contractor is an independent worker, not an employee. This is to comply with state and local laws regarding worker classification and avoid misclassification issues. For more information on outlining the contractor relationship, refer to our independent contractor agreement.

How to Write

Step 1 – Contact Information

You should include the contact information for all parties to the agreement. This usually consists of the business and the contractor. Include information such as:

• Name
• Address
• Phone number
• Email
• Title

Step 2 – Designate the Parties

Designate the company as ‘Client’ and the independent contractor as ‘Contractor.’ This relates each party’s actual name to the designation in the agreement and clarifies each party’s obligations under the contract.

Step 3 – Confidential Information

Define what confidential information is protected under the contract. This tells the contractor what information is secret and may not be disclosed.

It also defines what disclosure means so they clearly understand what conduct the agreement prohibits.

This section should also require the independent contractor to return any data, forms, or other information immediately after ending their association with your company.

Step 4 – Effective Date of the Agreement

The agreement’s effective date is typically when the contract is signed or when the contractor begins their work for the company. The agreement must clearly define when it starts.

It should also define the length of time covered. For most non-disclosure agreements, the contract lasts as long as the independent contractor works for the employer and for the time it takes to return all confidential information.

Step 5 – Non-Solicitation Clause

This clause prohibits your independent contractor from approaching and “stealing” your clients after the agreement. Your clients and client lists are extremely valuable.

Step 6 – Legal Provisions

Your independent contractor non-disclosure agreement should include important legal provisions, including a(n):

• Indemnification clause
• Governing law and choice of law clause
• Entire agreement clause
• Severability clause

Step 7 – Consequences for Breach of Contract

The contract should define what happens if the contractor breaches the NDA. This could include injunctive relief, monetary damages, and other ramifications that warn the contractor what may happen if they violate the agreement.

Step 8 – Add Signature Lines

The signature lines should include a line for each party’s printed name, signature, and a date for the signature.

Sample

The below independent contractor non-disclosure agreement template is available to download in Word or PDF format. Check out the sample to help you get started.

Frequently Asked Questions